During the Great Depression,consumers and producers in the United States dramatically reduced their spending relative to the quantity of goods and services available at the time.Which economic principle does this statement BEST represent?
A)Choices are necessary because resources are scarce.
B)When markets don't achieve efficiency,government intervention can improve society's welfare.
C)Overall spending sometimes gets out of line with the economy's productive capacity.
D)Government policies can change spending.

Question

Quizplus · Accepted Answer

The statement suggests that there was an imbalance between overall spending and the economy's productive capacity during the Great Depression, which is the principle of macroeconomics known as Keynesian economics. This principle highlights the importance of government intervention to stabilize economic fluctuations and balance overall spending with an economy's productive capacity.

During the Great Depression,consumers and Producers in the United States